Does anyone know what if any effect european delivery has upon a dealers allocation of the S5. I'm being told an ED car is counted against the dealers allocation of cars.

no, i'm positive that ED car is NOT counted against the dealer allocation of cars. Please tell the dealer to call Audi Headquarter if they need confirmation.

Net result is no allocation required from their grant by Audi.

Tell them to call Audi. Went through the same on my RS4.

It says RS4 have no set 5% discounts like other models, so I wanted to know if there is room for negotiation.

Maybe you could do better in a town with a more competitive Audi dealer situation.